Japan’s Capcom slashes forecast and cancels games

Storied Japanese publisher Capcom slashed its forecast and canceled a number of games because its traditional video games aren’t selling as well as expected.

The struggles of the Japanese video game publisher — known for the Mega Man, Resident Evil, and Street Fighter franchises — are similar to those of rivals such as Square Enix, which recently reported a huge loss and parted ways with its CEO.

Capcom took a special loss of $73 million due to game cancellations. It blamed a drop in game quality on excessive outsourcing of projects to cheaper overseas developers. It also cited “insufficient coordination” overseas. In the future, it will focus more on internal game development.

The company also said it is doubling down on “digital strategies,” such as increased downloadable content (DLC) for its retail titles. Capcom still forecasts a net profit of about $29.5 million for the fiscal year ended March 31. That is due in part to strong sales for its Resident Evil 5 slot machine.

The DmC: Devil May Cry title is expected to sell 1.15 million units, down from the original forecast of 2 million. Resident Evil 6, once expected to sell 7 million units, is now forecast to sell only 4.9 million units.